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eBay Describes the Scale of Its Counterfeit Goods Problem 124

Ian Lamont writes "As the Tiffany vs. eBay lawsuit winds its way through a federal appeals court, eBay has trotted out some numbers that show how many sellers attempt to sell fake goods on the auction site. Millions of auctions were delisted last year, and tens of thousands of accounts were suspended after reports were made to eBay's Verified Rights Owner program, which lets trademark owners notify eBay of fake goods being sold on the site. eBay says 100% of reported listings were removed from the site last year, most within 12 hours, and the company uses sellers' background information to make sure that they don't create new accounts to sell delisted items. Tiffany brought the suit against eBay in 2004, alleging that eBay was turning a blind eye to counterfeit luxury goods and demanding that eBay police its listings for bogus goods. Tiffany lost the case last July and will shortly present its arguments to the US Court of Appeals for the Second Circuit in New York. A similar case in France cost eBay $61 million."
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eBay Describes the Scale of Its Counterfeit Goods Problem

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  • Sure... (Score:5, Interesting)

    by russotto ( 537200 ) on Friday March 20, 2009 @10:08PM (#27276379) Journal
    ...but how many of those items were NOT counterfeits, but merely real items that the trademark owner wants to illegitimately prevent from being legitimately resold? Like that GAP promotional CD a while back.
  • by Zerth ( 26112 ) on Friday March 20, 2009 @10:12PM (#27276411)

    I used to work at an electronics retailer and we'd sell our returns on ebay(those that were functional, we had a lax return policy).

    Despite being authorized distributers of the products we put on there, we had our accounts suspended several times by VeRO when one of the many third party watchdog services reported us erroneously. We usually had to track down somebody at the manufacturer and get them to fax "yes they can sell our stuff" to ebay.

    And then a few weeks later, it'd happen again. Those watchdog services must get paid by # of items removed.

  • by adisakp ( 705706 ) on Friday March 20, 2009 @10:12PM (#27276413) Journal
    It's not just Tiffany or designer products. EBay is full of counterfeit stuff for everyday goods as well. 90% of the razor blades on EBay are fakes. If you buy Gillette Fusion refills there, you're likely to get something that looks nearly identical but will tear off half your face when you try to use them. I got ripped off for $70 -- and getting refunds through Paypal / EBay for counterfeit items is a joke when they want you to return the items with tracking to China where they'll just be used again to scam another consumer.
  • by wshwe ( 687657 ) on Friday March 20, 2009 @10:16PM (#27276429)

    Too bad eBay doesn't put as much effort in to shutting down scammers of all kinds, not just those selling fake name brand goods.

  • by VinylRecords ( 1292374 ) on Friday March 20, 2009 @10:17PM (#27276437)

    Site policy has zero tolerance for sellers who list counterfeit items, and will also suspend any seller who lists a counterfeit item more than one time. Sharpe reports that...30,000 sellers [were] suspended.

    One of the major reasons that eBay has so many fraudulent listings is that scam artists exploit a flaw in eBay's user database. And I'm not even talking about listening bootlegged or forged items. I'm talking about listing items that don't even exist.

    The scam artists find eBay accounts and break into them, specifically accounts that have high feedback numbers (or transactions recorded) but have little activity in the last year. They basically dig through the user database for inactive accounts and then try to hijack them, taking over the account, and then changing the billing information before listing the fake items. Because the hijacked account already has positive feedback with it people are far more likely to trust the account and auction, not being critical enough to suspect they are being scammed for money or being sold knockoff items.

    Another scam I've seen is where people purchase tons of electronics, like say they purchase dozens of video game consoles. They take pictures of the consoles to prove that they have them in hand. They then sell them to friends, family, or strangers for cash in person, while keeping the receipts for the original product. They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.

    I purchase tons of expensive electronics on eBay. Multi-thousand dollar synthesizers, hardware video editing consoles, and vinyl record components. Some items seem to be half scams and half real and eBay doesn't do a damn thing to stop people from listing fake items. They rely on users to constantly scream at eBay to take the fake listings down. I have to persist often to get eBay to take down the endless fake auctions for Pioneer DJ components that are listed day after day and eBay still can't figure out a filter for this problem.

    At the end of the day eBay is still great (minus the shipping charges).

  • Re:HAH!!! (Score:2, Interesting)

    by Rip Dick ( 1207150 ) on Friday March 20, 2009 @10:24PM (#27276479)
    There's no way to tell through the serial #'s? Personally, I would only use ebay to buy a beginner guitar. For higher end guitars like PRS or Gibson, I'd probably try Musiciansfriend.com. If you're gonna spend the money, why not spring a little more for a brand new guitar?
  • MMO gold (Score:4, Interesting)

    by Anonymous Coward on Friday March 20, 2009 @10:25PM (#27276481)

    I see hundreds of MMO (ok, WoW) gold listings every day, and if ebay claims 100% vero compliance that probably accounts for a lion's share of their statistics. Blizzard aggressively has these taken down, I know because when I auctioned my account they had that taken down even though I was including the game with it (first sale doctrine gives me the right to sell my cds, and I am equally free to expose my account information as I please).

    I would have filed a counterclaim, except that by the time ebay removed my auction, it had already closed and the deal was done -- but to comply with vero, they deleted the auction anyway and *refunded my fees* accordingly. So, uh, thanks to Blizzard and ebay!

  • by kangol69 ( 1167551 ) on Friday March 20, 2009 @10:43PM (#27276551)
    I was selling some Monavie Active on ebay. Monavie Active is basically a health juice drink that is sold exclusively by Monavie Inc. so it is in Monavie's interest to stop people from selling Monaive active on ebay because they have a monopoly over the product. So they report every listing they find on ebay as Infringing on their copyright and ebay automatically takes it down. Now this wouldn't be so bad if ebay had good support but ebay in my opinion is lacking in that area. You can do the whole live chat thing but the reps on that have no influence over the VERO program. You have to reach them by a hidden form on their site and then you get an email address (rswebhelp@ebay.com) All you'll get from talking to them is that you have to contact the company that filed the infringement (Monavie) to resolve it. Now remember Monavie has a monopoly over their product and so their is no way they'll resolve this with me peacefully. Now I admit that ebay is just trying to play nice with everybody but they should really do more to support the little guy when he starts getting squished by the big Corps.
  • by Vectronic ( 1221470 ) on Friday March 20, 2009 @11:11PM (#27276653)

    Maybe I'm just mo naive than some, but, isn't that a legitimate case, ie: they are within the law to ask eBay to remove/disable/etc your ability to sell their product.

    Maybe you should contact them, sign up to be a distributor. Or make your own kool-aid, and sell that so they don't have a "monopoly". And I'd like to point out that a quick search led me to 3 companies, MonaVie, AgroLabs and Dr. Tims, which means there is probably another 6 at least.

  • Re:Sure... (Score:4, Interesting)

    by Anonymous Coward on Friday March 20, 2009 @11:17PM (#27276683)

    I was selling a used Kaplan book,

    This VERO program ... they canceled my auction, emailed all the bidders and told them i was a criminal selling counterfeit stuff?

    Ebay said there was nothing they could do? (wtf it is their website???) Kaplan just did not want people selling used books.

  • Re:Sure... (Score:4, Interesting)

    Sounds like a perfectly reasonable excuse to prevent a legit buyer of a pair of the original 500 jeans from reselling their product... Lets lawyer up!

    I understand your point, and would like to propose a little thought experiment.

    Suppose I buy a pair of those jeans from "Company X," without any way of knowing whether the scenario you described has transpired or not (I'll leave it to other posters to argue the finer points of your post). I then turn around and sell the jeans on eBay. Am I then complicit in any wrongdoing, assuming I can prove that I paid good currency for the product in the first place?

  • Buy local (Score:2, Interesting)

    by sjdude ( 470014 ) on Friday March 20, 2009 @11:28PM (#27276741)

    This is why I hardly ever buy on eBay any more (sell yes, buy no). I buy stuff on craigslist.org precisely because I can inspect stuff myself first hand before buying, and if I'm stupid enough (or want) to buy a fake, that's my problem. Not surprisingly, eBay owns 25 percent of craigslist now, but buying remotely, sight unseen, from "discount sellers" though eBay is, IMHO synonymous with asking to get ripped off. Its just too easy, as other posters have pointed out, to rip people off, and neither eBay nor Paypal do a damn thing about it.

  • Re:Sure... (Score:3, Interesting)

    by kylben ( 1008989 ) on Saturday March 21, 2009 @12:00AM (#27276889) Homepage

    how many of those items were NOT counterfeits, but merely real items that the trademark owner wants to illegitimately prevent from being legitimately resold?

    Lots and lots. EBay, as they say, removes 100% of reported listings.

    A hall of shame from someone who likes to countersue... or is it just sue.... or... take these companies to court, and win: http://www.tabberone.com/Trademarks/HallOfShame/HallOfShame.shtml [tabberone.com]

  • by kangol69 ( 1167551 ) on Saturday March 21, 2009 @12:30AM (#27277005)
    Why do they have the ability to say that I can't sell their product? I bought it directly from them and it's an authentic product. That's like some company telling me I can't sell my old stuff at my own garage sale. By monopoly I meant that they are the only seller of their product. Monopoly was the wrong word. They don't have any resellers of their product so the only way to get it is directly from them. Therefore they lose money if someone buys it off of ebay because to order it from them you have to sign up to be in their pyramid scheme. Also I did contact Monavie and all I got was a sarcastic "We're Sorry" email.
  • by Zerth ( 26112 ) on Saturday March 21, 2009 @12:32AM (#27277013)

    I just figured after we were on a name basis with some of them they would've reminded the watchdogs that there are legit distributers.

    But you're right, the only time we ever saw a change was when we shipped a pallet(some good as new, some we would have written off) back to the manufacturer with 3 canceled ebay notices attached to the shipping papers.

    Didn't have a problem with them again, but, as you say, we weren't big enough to do that to someone like Monster Cable(who is the great Satan anyway).

  • by bitrex ( 859228 ) on Saturday March 21, 2009 @01:17AM (#27277129)
    A common scam that I've fallen victim to on at least one occasion when buying synthesizers on Ebay is the "It must have broken during transit" scam - the seller knows that an item is nonfunctional but sells it at full price, and before it ships puts a little exterior damage on it to make it look like it was damaged in shipping when really the thing was a basket-case to begin with. The seller and Paypal then instruct you to bug UPS for insurance money, which you will never get because the package itself generally has no signs of damage. I had one synthesizer that was in "fully functional condition" arrive with two broken keys - sure, that MIGHT have happened in transit, but what about the burned traces in the power supply? I always give preference to sellers now who have gone to the effort to make YouTube videos of their gear to show that it is in good operating condition.
  • by adisakp ( 705706 ) on Saturday March 21, 2009 @01:20AM (#27277143) Journal
    I didn't know they were from China until after I received the item. There's no way to verify where an item is going to come from just by using EBay and Paypal until after you receive it. Furthermore, they were using an account (that was probably hacked) that had high 100% feedback.
  • by coldwatergator ( 1505685 ) on Saturday March 21, 2009 @01:23AM (#27277157)
    It is very difficult for a purchaser to effectively file a counterfeit item report with Ebay. Realistically, they must get the assistance of the manufacturer to do so. I got stung when I purchased what was listed as an OEM part that had been out-of-production for a couple of years. The manufacturer was not interested in pursuing the matter. I would have had to pay for a qualified expert witness to examine the item and report on the item. The seller had admitted to me that they were having the items manufactured in China but labeled as being made by a reputable multinational firm in Japan. Even with my status of being a licensed PI and having some "Expertise" in the field of this part, Ebay refused to take substantive action. Paypal reversed the charges but that was it. Pursuing the matter with Customs and USPS is difficult without the assistance of the legitimate manufacturer. But they weren't interested in working a part that has been out-of-production for a couple of years. The Ebay power seller is still in operation. A close examination of his feedback shows that some others have been unhappy with the quality of his items, but "Happy" because he did refund the money when they complained and returned the item. I didn't want to ship contraband back to him as it is illegal to do so. I still hold the item and plan to sue him in civil court.
  • by seebs ( 15766 ) on Saturday March 21, 2009 @02:56AM (#27277297) Homepage

    Look at the rate at which they've been able to get Scientology stuff banned from eBay (such as 100% legit e-meters)... Because if there's a used market, the CoS doesn't make as much money.

  • by DavidD_CA ( 750156 ) on Saturday March 21, 2009 @03:02AM (#27277309) Homepage

    They then list the consoles on eBay and sell them to people taking the money from PayPal. But, because they've already sold the item off for cash, they tell the person who sent them money over PayPal that they will get a refund. They then call the cops, say that they have been robbed and someone stole several dozen expensive electronic components from them and then they recover whatever homeowners or rental insurance covers stolen property.

    Lately, whenever I've sold something on PayPal that's been more than $50, PayPal has held the money in escrow until either the buyer gives me positive feedback, the shipping company confirms the package was delivered, or 30 days goes by. It's happened to me at least 6 times in the last couple of months. It's not annoying, but it does cause a small delay in getting my money.

    As for telling the police about the stolen goods and getting an insurance claim, I'd have to imagine someone can only try that once in their life. I'd like to think that the second time, the police might suspect something and the insurance company would laugh at you.

  • by thetoadwarrior ( 1268702 ) on Saturday March 21, 2009 @07:18AM (#27277879) Homepage
    Regarding counterfeit fashion gear, the problem is more the fact no one cares. They know it's counterfeit and just care about what people see them wearing.

    Like someone is actually going to believe that a person driving some old little hatchback car with a job at Tesco actually bought a real Fendi bag.

    My complaint is how hard it is to buy real video games thanks to all the junk from Hong Kong.

    Maybe it's improved but if ever I go back to buy a game from ebay I will flat out refuse to buy from anyone that looks like their image came from a google search.
  • Re:Sure... (Score:3, Interesting)

    by TheRaven64 ( 641858 ) on Saturday March 21, 2009 @08:25AM (#27278081) Journal
    If they emailed the other bidders saying that you were a criminal then you probably have grounds for a libel suit. If they do this to a lot of people, you may be able to share legal costs. In a libel case, they are required to prove that their defamation (that you are a criminal) is true which, assuming you are not, is going to be difficult.
  • Re:HAH!!! (Score:3, Interesting)

    by Znork ( 31774 ) on Saturday March 21, 2009 @10:46AM (#27278747)

    Of course, today it often works out like this: Company A pays Xa to market a trademark. Company A needs something to sell to recoup marketing costs, and know their campaign generate an average product purchase rate of Za. Company A buys generic goods from production company B for Ya. Company A sets price of product to (Xa/Za)+Ya.

    Well, that often comes along with it, but in principle it's not necessary unless the original design cost is so low that it is close to the design cost of copying.

    Amortized of the series we're talking about design cost is negligible, even if you actually do it inhouse; design isn't a very people-intensive area. Marketing, lobbying and channel control would be far more expensive.

    I suspect trademarks are only slightly less damaging to the economy than patents and copyright, but at least their damage isn't infinite as far as to preventing others from distributing similar goods.

    There are also reasonable ways to counter the worst of the damage; one could require goods to be designer, producer and product ID marked to be protected by trademarks, ie, if the trademark owner outsources design and production, then customers can buy the exact same unmarked good by buying no-name product ID referenced goods, basically bypassing the scam.

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